Smart Vending Showcase at SAPPHIRENOW

The Internet of Things is bringing together mobile, big data and the cloud from SAP, the firm best prepared to according to a leading analyst firm. We put together a showcase that can be found in the User Experience area to shows how we bring all of these together to improve invenory management, deliver dynamic sales promotion, offer remote service management and detailed analytics.

The Use Case:

A large Vending machine Operator approached SAP with a basic question: The basic challengefor a firm with a large fleet of vending machines is that the operator has no insight into the inventory level of a particular machine. Either they discover on a replenishment visit, the machine is out of stock, meaning the operator has lost days of sales or the machine hasn’t sold anything, thus the truck run cost and time was wasted.

From that premise we drove innovation with the customer to extend the basic inventory question to an end-to-end M2M scenario that covers the basic replenishment and service operations by transmitting each sale wirelessly. The operator knows the exact sales and inventory of each machine and can streamline his operations by only loading needed product on the trucks (reduce excess product damage) and scheduling replenishment runs only for machines that are close to stock out (eliminating stock outs and wasted truck runs). From there we explored additional use cases around consumer personalization. The machine now knows the consumer and transaction history, therefore we can run promotions and loyalty programs (new business model, increasing revenue) and add additional services like utility bill payments and cell phone top-up. Using the GSM backchannel we can also change prices on the fly and offer personalized promotions and loyalty programs based on the demand signals we get from each machine or consumer.

So we will be able to help vending operators to increase their revenue and open new business models by offering real time price changes based on demand, loyalty and promotions on the machine wirelessly.

In addition, we have built a predictive solution that based on historic sales and demographic data calculates the optimal product mix for a specific location across the vending machine fleet (optimizing sales and the placement of new machine). Vending Machines in Fitness Studios are likely to have a different product mix than office or factory locations, eg. more sparkling water. Using the predictive algorithm, we are able to automatically calculate the best product mix for a location based on historic sales and additional demographic data and significantly improve sales and revenue and well and predict the performance of new locations.

This also enables the operator to introduce seasonal products (new business model, increase sales).

Moreover, the vending machine has sensors that report machine failure in real time and issue a service ticket for a technician (reducing service cost, increasing revenue). Now you can tie in this information seamlessly so a technician can be sent to service the equipment using either SAP CRM Service Manager or SAP Work Manager mobile apps.

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Lastly, real time analytics and mobile apps for executives, analysts and drivers help identify low rotating, low margin products and can feed into the product mix optimization further streamlining the business.

These Apps provide real time insight into:

– Revenue

– Product rotation,

– Machine, Zone profitability,

– Prospecting performance and prospector incentivation

As mentioned earlier, we brought to bear a number of technologies from mobile, big data and cloud. Here is a short list of what we used: